George Westinghouse and the Business of Innovation During the Age of Edison

Steven W. Usselman

From Novelty to Utility: George Westinghouse and the Business of Innovation during the Age of Edison

This article argues that Thomas Edison and George West- inghouse, despite some shared characteristics in their approach to technical problems and a common interest in electric power, pursued distinct markets for innovation. Edison sold novelties to upper-class urbanites, whereas Westinghouse provided equipment to railroads and other industrial customers. As a consequence, the two entrepre- neurs consistently exhibited different attitudes toward the process of innovation and different inclinations as business- men. Westinghouse, more than Edison, foreshadowed the coming of corporate research and development.

ince the late 1970s, few areas of inquiry in business history Shave proved as fruitful as the study of corporate research and development. Moving beyond an older, simpler image of R&D as science applied by industry to produce novelty, historians now interpret R&D programs as components of corporate strategies designed to address specific business conditions.1 Corporations typically created laboratories in hopes of attaining order and control over established lines of business.2 In joining programs of technological development to their production and marketing

STEVEN W. USSELMAN is associate professor of history at the University of North Carolina at Charlotte. I wish to thank David Hounshell for his sustaining interest in this project and for his help in obtaining illustrations and Glenn Porter for his wise counsel after reading an earlier draft of this essay.

1 For a recent review of this literature, see John Kenly Smith, Jr., "The Scientific Tradition in American Industrial Research," Technology and Culture 31 (1990): 121-31. 2 For an excellent discussion of the motivations behind the founding of two important early laboratories, see Leonard S. Reich, The Making of American Industrial Research: Science and Business at GE and Bell, 1876-1926 (New York, 1985).

Business History Review 66 (Summer 1992): 251-304. © 1992 by The President and Fellows of Harvard College. Steven W. Usselman I 252 organizations, these firms gave life to institutions that inexorably altered the ways in which new technology was generated and dif- fused. A new breed of managers, the corporate research directors, emerged as important figures in the realm of science and technology.3 Their prominence signaled clearly that bureaucracy and organization had come to exert powerful influences on the course of technological innovation. Studies of R&D have revealed many important and suggestive insights into the connections between economic institutions and technical change, but they have concentrated on the twentieth century, when corporate research programs acquired a distinct identity at several prominent firms.4 Historians have made far less headway in addressing similar issues during earlier stages of the corporate revolution. Our understanding of the process of technological innovation during the last quarter of the nineteenth century remains highly fragmented. Case studies tell us how particular firms innovated technologically, but we lack synthetic interpretations that draw comparisons and consider relations among firms.5 Perhaps the single greatest exception to this generalization is the work of Thomas P. Hughes. Throughout his distinguished career, Hughes has sought to bring a more structured analysis to the elusive subject of invention and innovation. In American Genesis, he summarized his thinking about inventors of the late nineteenth century and made them the foundation stone of what he called "a century of technological enthusiasm" that began in the United States in 1876. By placing his analysis of inventors such as Thomas Edison and Elmer Sperry in a larger chronological context that includes corporate research, Hughes invites comparison between the processes of technological change in the different

3 Ibid. For an insightful discussion of one prominent research director, Charles M. A. Stine, see David A. Hounshell and John Kenly Smith, Jr., Science and Corporate Strategy: Du Pont R&D, 1902-1980 (New York, 1988), 125-37. 4 Many of the recent treatments of corporate R&D begin with overviews of technical activities at the firms prior to 1900, but these introductory sections seldom examine the connections between technical expertise and business strategy and organization with anything close to the detail and insight they achieve for the period after 1900. For a partial exception, see Reich, The Making of American Industrial Research, chaps. 2, 3, and 6. On research during the nineteenth century at Bell, also see Lillian Hodde- son, "The Emergence of Basic Research in the Bell Telephone System, 1875-1915," Technology and Culture 22 (1981): 512-44. 5 For an important exception that connects research to corporate structure across an entire industry during the nineteenth century, see Reese Jenkins, Images and Enter- prise: Technology and the American Photographic Industry, 1839-1925 (Baltimore, Md., 1975). George Westinghouse and the Business of Innovation I 253 institutional settings of late nineteenth and early twentieth century America. He writes of "independent inventors" who produced "radical" inventions in the nineteenth century, of "industrial scientists" who "were often constrained" and produced "conserva- tive" ones in the twentieth. The rise of technological systems drew a line between the independents and the industrial scientists. Independents invented systems; industrial scientists were left to work within them. "System-originating" inventions gave way to "system-improving" ones.6 In this conceptualization, Hughes naturally reserves an espe- cially prominent place for Thomas Edison, who provides the archetype for the independent, system-originating inventor. Hughes devotes virtually none of his account to George Westing- house, Edison's famous contemporary and notorious adversary in the field of electric light and power. This comparative neglect of Westinghouse is very much in keeping with the balance of attention paid the two men by other historians in recent times. The collection and cataloging of the vast Edison archives has unleashed a flurry of outstanding new studies by specialists. At the same time, generalists seeking to incorporate invention and technology into the American experience have naturally turned first to the familiar figure of the Wizard of Menlo Park. This concentration on Edison at the expense of Westinghouse marks an intriguing depar- ture, however, from the view that prevailed during their own life- times and for many decades afterward. Even before the notorious "battle of the currents" linked their names in the public consciousness a century ago, Edison and Westinghouse often appeared as a matched set. And as recently as a generation ago, Harold Passer gave them twin billing in his outstanding study of invention and entrepreneurship. In Passer's assessment, Edison and Westing- house represented two peas in a pod, the two "pioneer innovators" of the electrical industry. "The similarity between the two," he concluded, "is striking."7

6 Thomas P. Hughes, American Genesis: A Century of Invention and Technological Enthusiasm (New York, 1989). For a comprehensive, integrated presentation of his ideas, see Thomas P. Hughes, Networks of Power: Electrification in Western Society, 1880-1930 (Baltimore, Md., 1983). On his thinking about invention, see also Thomas Parke Hughes, Elmer Sperry: Inventor and Engineer (Baltimore, Md., 1971) and Tho- mas P. Hughes, Thomas Edison: Professional Inventor (London, 1976). 7 Harold C. Passer, The Electrical Manufacturers, 1875-1900: A Study in Competi- tion, Technical Change, and Economic Growth (Cambridge, Mass., 1953), esp. chap. 11, quotation from 192. Steven W. Usselman I 254

This article attempts to bring Westinghouse back into the picture and to assess his career in light of the transformation that Hughes has demarcated. Utilizing materials found in the archives of several railroads, it seeks to re-evaluate Westinghouse, and it draws on recent scholarship to offer fresh comparisons between him and Edison. This perspective suggests that the two men shared important traits as inventors but differed markedly in their approach to the business aspects of innovation. From his early years as a contract inventor for the telegraph industry through the obsessive pursuit of better sound reproduction that occupied him into old age, Edison devoted his talents to providing novelties for the urban upper class. His enterprises always made novelty their top priority, often at the expense of development and manufacturing. Frequently they gave way to more focused competitors. Westinghouse, by contrast, began his professional life marketing innovative products to the railroads, a small group of highly organized institutions that placed a premium on system and order. He responded with a variety of business tactics, including clever use of patent rights and a keen appreciation for technical compromise and standardization, that enabled him to secure tight control over several products. Later, his endeavors in electric power and other fields exhibited similar characteristics. As a consequence, West- inghouse better exemplified the features of systematic, ordered technological development that would become hallmarks of corporate R&D. More than Edison, he foreshadowed the future.

Edison: Inventive Showman

Contrary to what his involvement with electric power might sug- gest, Thomas Edison made his living by dealing in novelty. He thrived in the early phases of an industry or line of business, when profits resulted from an ability to provide something that no one else could. This feature of Edison's activities emerges clearly if one surveys his entire business career, as Andre Millard has done in his excellent study of Edison.8 Like some other recent students of the inventor, Millard

8 Andre Millard, Edison and the Business of Innovation (Baltimore, Md., 1990). Although the portrayal of Edison that follows rests heavily on material presented by Millard and at some points shares his interpretations, my account differs substantially in organization and analysis. George Westinghouse and the Business of Innovation I 255

Edison's Menlo Park Laboratory, 1880 • Edison moved his operations from Man- hattan to Newark, New Jersey, in 1871, then removed them to this nearby rural setting in 1876. He referred to the facility as his "invention factory" and promised to deliver a "big trick" every six months. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 6294C.) locates Edison personally and intellectually not in the ordered, corporate environment of the modern electrical industry, but in the informal, more chaotic realm of machine shop culture, where fellowship and technical cleverness counted more than wealth. Edison "absorbed" this "craft culture" as a young man while working as a contract inventor for the telegraph industry, which presented "endless opportunities" to those who could devise electromechanical devices. Confident of finding a market for their creations and free from the responsibility for manufacturing them, Edison and other contractors engaged in a friendly, cooperative contest to produce novelties.9 "After years in the telegraph indus-

9 Ibid., 24-31. For an extensive discussion of Edison and the telegraph business, see Paul Israel, "Telegraphy and Edison's Invention Factory," in Working at Inventing: Steven W. Usselman I 256

try," notes Millard, "Edison was certain that he could master any electromechanical machine."10 That conviction defined and sustained him for the rest of his life. When his invention of the multiplex telegraph gave Edison a measure of financial independence, he launched his "invention factory" at Menlo Park, the first of a series of business ventures through which he attempted to replicate the inventive culture of the telegraph contractors and to apply it to other domains. Later he moved the laboratory to West Orange, and periodically he formed affiliated organizations such as the Edison Industrial Com- pany and Thomas A. Edison, Incorporated. The purpose of these enterprises "was to develop both the practical and the fantastic products of Edison's imagination."11 Their top priority was always to provide Edison with the tools to test his ideas and, if possible, to translate them into working prototypes. What happened beyond that was of secondary importance. "Although Edison liked to think of himself as a practical inventor, a businessman who judged a project by the size of the financial return," writes Millard, "the records of the laboratory show a man happily investing his fortune into scores of experiments carried out more for the fun of doing it than the expectation of profit. "12 Once freed from contractual obligations to the telegraph industry, Edison jumped from one idea to another, producing an extraordinary stream of inventions. Many of these—the carbon button telephone, incandescent lighting, the cylinder phonograph, dictation equipment, moving pictures, X-ray machines, storage batteries—attracted widespread public attention. Hundreds of others, often no less creative, never moved outside the laboratory. This truly remarkable record of invention served as vivid testimony to the power of Edison's imagination and to the shrewdness of his vision in establishing the laboratory. In the telegraph industry Edison had glimpsed the rich creative opportunities inherent in the melding of electrical and mechanical technology. He had in particular recognized the potential of certain materials to produce novel effects. The facilities at Menlo Park and West Orange, with

Thomas A. Edison and the Menlo Park Experience, ed. William S. Pretzer (Dearborn, Mich., 1989), 66-83. Hughes also stresses the importance of shop or Graft culture in the careers of Edison and other independents in his American Genesis, 24-47. 10 Millard, Business of Innovation, 57. 11 Ibid., 18. 12 Ibid., 113. George Westinghouse and the Business of Innovation I 257

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Early Sketches of Multiple Telegraphy, Edison Notebooks, 1874 • This rapid series of sketches of various duplex telegraph circuits displays Edison's characteristic inventive creativity. The problem of transmitting two or more messages simultaneously over the same wire occupied Edison and his brethren in the community of telegraph inventors throughout the early 1870s. Sales of his quadraplex designs to Western Union in 1876 provided Edison with the financial means to establish the laboratory at Menlo Park. (Reproduced courtesy of Rutgers University from The Tapers of Thomas A. Edi- son, vol. 2: From Workshop to Laboratory, June 1873-March 1876, ed. Reese Jenkins etal. [Baltimore, Md., 1991], 322-23.) their libraries, chemical departments, and scientific consultants, functioned first "as a net to capture ideas from the many streams of technical information."13 Edison then sifted through the ideas and generated novelties. He did so in remarkably short order, in part because as he went along he and his mechanics developed something of a standard repertoire of approaches that they could bring to any problem. Having used revolving cylinders in the phonograph and the stock ticker, for instance, Edison chose it as the format for his experimental moving pictures. Later, in attempting to synchronize sound with the pictures, Edison's mechanics "experimented with the same break wheels, tuning forks, ratchets, and electromagnetic devices they had used many times before," observes Millard. "Their experience in working on telegraph instruments obviously

bid., 9. Steven W. Usselman I 258

Edison's First Commercial Invention, 1868 • This mechanical vote recorder employed an electromagnetic device to control the movement of a revolving cylinder, two features that would recur frequently in Edison's creations throughout his career. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 7205.) was helpful."14 Thomas Hughes has noted that the creations of prolific inventors almost always exhibit recurrent motifs. Hughes refers to this phenomenon as "inventive style." In perhaps the most evocative application of this concept, Hughes described Elmer Sperry as "a feedback solution in search of a problem." Looking for a common characteristic running through Edison's many inventions, Hughes referred to him as "the master of energy transformations. "15 Although Edison's speed and fecundity as an inventor can only inspire admiration, they cannot ultimately be understood apart from his comparative failure in other aspects of business. When Edison left the telegraph industry, he gained creative freedom but sacrificed the security and convenience of a ready market for novelty. Western Union, not Edison, had selected the ideas worth

"Ibid., 140. 15 Hughes, American Genesis, 68. George Westinghouse and the Business of Innovation I 259

Device' for arresting the rotation of the break wheel on my Universal Ptg Machine by a Magnet instead of Mechanically. A Description Unnecessary2 All previous Written Aug 25 1871 Witness Jos T Murrey1 T. A. Edison Two Sketches of a Printing Telegraph, 1871 • This idea, a precursor of modern fac- simile machines, adapted the mechanism of the vote recorder to more universal purposes. "I do not wish to confine myself to any particular Translating Printing Machine," Edison noted before sketching several alternative arrangements a few days later, "as I have innumerable machines in my Mind now which I shall continue to illustrate & describe day by day when I have the spare time." (Reproduced courtesy of Rutgers Uni- versity from The Papers of Thomas A. Edison, vol. 1: The Making of an Inventor, Feb- ruary 1847-June 1873, ed. Reese Jenkins, et al. [Baltimore, Md., 1989], 325 and 342.) Steven W. Usselman I 260 pursuing, had brought them into production, had monitored their actual performance, and had made the refinements that inevitably occur in the course of developing new technology. Once on his own, Edison had to assume some of these burdens. He did, but never with the enthusiasm or the success that characterized his work as an inventor. Despite frequently stated intentions to the contrary, Edison consistently undertook just enough sales, development, and manufacturing to get by. "The object of the exercise was experimenting rather than making money," observes Millard. "The overriding goal of the business of innovation was to provide the financial support for Edison's life of inventing. "16 Though responsible for more than invention, Edison continued to spend most of his time in the laboratory, trying out new ideas. "If one of these stunts struck gold," Millard notes, "Edison was ready to drop everything and perfect it as a commercial technology. "17 But for Edison, the job of perfecting usually involved little more than quickly getting out something that people would buy before alternatives came along. Moving pictures, "the unex- pected success of one of Edison's stunts," provides an excellent example.18 In devising the Kinetoscope, Edison drew on the familiar revolving cylinder, despite the obvious difficulties it posed for manufacture. Described by Millard as "a hurried first attempt to get moving pictures into a form suitable for commercial exploita- tion," it remained Edison's product for several years while he and his staff plunged into a technically fascinating but commercially questionable effort to synchronize sound with the pictures. Mean- while, competitors developed the film projector and transformed movie-viewing into a popular public entertainment. Deprived of his monopoly in film, Edison hastily marketed a projector invented by someone else. Several years later, he attempted to reclaim the initiative by marketing a home projector, but that failed when the machine proved unreliable and he could not supply sufficient films. With so little inclination to refine his prototypes and routinize their manufacture, Edison gravitated continually to environments that would reward him for his novelties, as Western Union had. Sometimes he fell back into contract arrangements, which were

16 Ibid, 48. 17 Ibid. 18*Th' e following discussion of moving pictures is based on ibid., esp. 135, 140-45, 16&-76, and 225. George Westinghouse and the Business of Innovation I 261 available from Bell and the electrical manufacturers as well as from the telegraph company. More typically, he looked to the swelling ranks of urban businesses. Edison had lived in Manhattan as a young adult, and his telegraphic inventions had made their way into business offices. The move to New Jersey, made in part at his wife's request, took him out of the city physically but attached him more closely to its upper-class culture. As an independent inventor, he never lost sight of the urban upper-class market, and he never succeeded outside it.19 In 1887, with the formation of the Edison Industrial Company, Edison explicitly oriented his endeavors toward providing the urban elite with novelties. He promoted the company as " 'one organized avenue for the manufacture of all his inventions' " and envisioned its products as " 'useful things that every man, woman and child wants'—to be sold through a network of jobbers." Despite the references to manufacture and a universal market, Edison had in mind nothing like the concentrated enterprise that Henry Ford would create. He sought flexibility. Stung by the costs and burdens of developing and marketing electric lighting, "Edi- son wanted to avoid 'cumbersome inventions like the electric light' and concentrate instead on small products with a high profit potential and low capital requirement. " Edison had in mind a variety of electrical appliances, including typewriters and fans, which only the few people with electric service could have used.20 In actuality, the phonograph soon came to dominate the new company, as it would so many of Edison's affairs through the years. No other area of invention occupied so much of his energies, and none better exemplified his talents and inclinations as an inventor and businessman.21 Edison created the phonograph in 1877 in a classic laboratory stunt. After briefly exhibiting it as a curiosity, he let it drop for a decade, until a technicality of international law deprived him of his patent rights. Having neglected the device while he enjoyed a monopoly, Edison for the next three years

19 For another recent biography that stresses the connections between Edison and the growth of cities, see Martin V. Melosi, Thomas A. Edison and the Modernization of America (Glenview, 111., 1990). 20 Millard, Business of Innovation, 56-57. 21 This and the following paragraphs on the phonograph are based on ibid., 60-87, 160-69, 186-221, 253-68, and 295-319. "Many remember Edison as the man who brought the wonders of electric light to the world," writes Millard (220-21). "Yet in terms of the amount of time spent experimenting on the phonograph, Edison should be remembered as the man who labored for years to bring us the clear, faithful reproduction of music. This was his life's work." Steven W. Usselman I 262

Edison Posing as an Industrialist, 1892 • Periodically, Edison would declare his intention to give up inventing and become a businessman who would supervise integrated enterprises. In life as in the photograph, it was a role he assumed without complete comfort or conviction. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 5780.) threw the full resources of the Edison Industrial Company at it, ostensibly in an effort to mass produce phonographs for recording and playing dictation. But the inventor could not stabilize his design. Eventually, he turned responsibilities for manufacturing over to licensees, who soon met with success by concentrating on George Westinghouse and the Business of Innovation I 263

Edison and Close Associates with the Phonograph, 1888 • This publicity photograph captures Edison (seated, in the center) with two of his passions: a team of "muckers" willing to work through the night, and the phonograph. The cylindrical recordings, which would remain his preferred format long after competitors had switched to discs, sit on the table in the foreground. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 6164.) simpler, playback-only models. Several years later, Edison rose to prominence in the burgeoning home entertainment market by producing affordable cylindrical recordings of such high quality that consumers bought Edison machines to play them. But success again proved fleeting. While Edison diverted profits to cover losses incurred from an attempt to manufacture storage batteries, Victor staked its life solely on the phonograph business. It stood ready with a line of technical improvements and, more important, a stable of performers under exclusive contract, headed by tenor Enrico Caruso. Selling musical entertainment rather than sound, Victor came to dominate a mushrooming mass market. Throughout his remarkable five-decade odyssey with the phonograph, Edison consistently found ways to engage in contests that would reward his technical ingenuity. Indeed, he seemed capable Steven W. Usselman I 264 of showing real enthusiasm only when someone else posed a challenge to his technology. Then Edison would respond, not ultimately to capture the largest share of the financial rewards, but to sustain his satisfaction in having designed the "best" machine. As long as some consumers showed interest in obtaining sound of higher quality, the phonograph business presented Edison with opportunities to receive compensation for technical novelty. More than any other area of interest to him, it recreated the conditions of the telegraph industry and, not surprisingly, Edison fell back on it time and again. He did not, however, make it his full-time occu- pation. Edison retained the freedom to find other outlets for his creative impulses, such as incandescent lighting, which began to occupy his attention at about the same time he invented the phonograph. In its basic contours, Edison's involvement with electric lighting exhibited the same hallmarks as his many other endeavors. With gas lighting and harsh electric arc lighting growing more commonplace, Edison spotted a market among urban businesses for softer electric light. He pieced together a workable set of lights, demonstrated them with great fanfare at Menlo Park, and installed them in Wall Street offices. Though the effort took two years and incorporated many components, electric lighting had much in common with the experimental prototypes Edison so often rushed to market in other fields. Edison called it a "cumbersome invention" and complained about the time and resources it absorbed, but he otherwise drew no distinctions between electric lighting and his other creations. He aptly likened it to a complex machine.22 The Pearl Street plant operated on about the same scale and level of complexity as a water-power facility at a factory. It powered only about 10,000 bulbs, enough to light perhaps two hundred houses today.23 Edison soon discovered, moreover, that the most vibrant demand was for much smaller isolated plants,

22 In his 1926 testimony about the invention, Edison drew an analogy between his electric lighting system and a complex mechanical machine. Historians of mechanical technology have long recognized the ability to arrange existing components in novel configurations as central to the act of invention. Cf. Brooke Hindle, Emulation and Invention (New York, 1981), 118—42, and Eugene S. Ferguson, "The Mind's Eye: Non- verbal Thought in Technology," Science 197 (1977): 827-36. 23 Hughes, Networks of Power, 43. George Westinghouse and the Business of Innovation I 265

The Second Floor at Menlo Park, 1880 • Edison (slightly left of center with ker- chief) was probably at the peak of his inventive powers at the time this photograph was taken (a few months after the opening of the Pearl Street station). Aside from the incandescent lights hanging from the ceiling, the laboratory retained much the same character as the shops in which Edison had first plied his inventive skills. Note the many vials of chemicals along the wall on the right. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 6164.) which generally included only a few hundred bulbs installed in a single home or factory.24 Like most Edison projects, the pilot plant at Pearl Street emphasized novelty rather than economy. Edison used it to show- case the new technology, not to study and refine it. Though he had shrewdly designed a system with installation costs comparable to those of gas systems, the inventor devoted virtually no attention to operating expenses. Without data on coal consumption and other basics, he could not calculate the actual costs of generating electricity.25 Since the system had no meters, Edison also had no way

24 Passer, The Electrical Manufacturers, 97 and 112-18. Isolated plants remained the stock in trade of the electrical manufacturers throughout the nineteenth century. Not until 1896, when the Westinghouse alternating current plant opened at Niagara Falls, did a system approach anything like the dimensions we associate with modem power facilities, and even then most of the power went only a short distance to the electroplating works built along the falls. See Hughes, Networks of Power, 135-39 and 264-65. 25 Millard, Business of Innovation, 90-92, and Hughes, Networks of Power, 43-^5. Steven W. Usselman I 266 to measure consumption. He charged a flat fee per bulb installed, regardless of usage. Edison sold incandescent light, not electricity. As usual, Edison turned to the urban elite in hopes of finding additional outlets for his latest entertainment. His representative in London exhibited the incandescent lights at fairs and arranged to build a station that would light Holborn Circus, a shopping and theater district. Edison hoped that wealthy visitors would see the effects and purchase isolated plants for their homes in the country.26 In fact, fashionable urban spaces initially provided the lion's share of the market. Theaters, banks, restaurants, shops, and hotels accounted for almost 90 percent of the incandescent lights in Berlin, whose early central stations resembled those found in most other cities with electricity.27 In New York and other Amer- ican cities, electricity spread "from store to store," as merchants found that "pedestrians could walk by stores of the same character lighted by gas without even seeing them, so attractive was the brilliant illumination further along" provided by electric light.28 Away from the central stations of the big cities, the same pattern prevailed. About half of the isolated plants that Edison installed before October 1885 served hotels, restaurants, and shopping dis- tricts.29 This was a market of conspicuous consumers, not hard- boiled managers seeking marginal cost advantages.30 "Electric lighting," noted Thomas Hughes after surveying early installations in New York, London, and Berlin, "was not for the poor. "31

26 Hughes, Networks of Power, 53-57. 27 Ibid., 73. 28 "Turning Off the Gas in Paris," Electrical World, 18 Sept. 1886, 4, quoted in Carolyn Marvin, When Old Technologies Were New: Thinking about Electric Commu- nication in the Late Nineteenth Century (New York, 1988), 173. Marvin's study pre- sents countless examples of the fascination and awe electric light elicited during its first decades. 29 Passer, The Electrical Manufacturers, 114. 30 Even when electrical suppliers sold plants to manufacturing interests, they found that qualitative changes made possible by electricity, not simple substitution of an electrical system for a mechanical or gas one, proved the most effective selling point. Many bought electric lighting because the enclosed filament posed less of a fire danger than the exposed flame of gas or arc lights. Some preferred incandescent light because it did not distort the colors of their products. The most attractive feature of electric power was its flexibility. One could run wires and place motors almost anywhere. Factory managers who previously had arranged equipment to conform with rigid shafting that transmitted power from a steam engine or water wheel now could place machines wherever they pleased. Cost advantages flowed from the ability to organize the produc- tive process without constraint, not from a reduction in the cost of power itself. Ibid., 112-18. 31 Hughes, Networks of Power, 73. George Westinghouse and the Business of Innovation I 267

As long as the primary appeal of electric lighting remained its novelty, Edison stayed involved. He even declared his intention to give up his other activities and to devote all his time to build- ing electrical plants.32 But as electrical installations became more common and consumers could base their decisions on an established record of costs, Edison retreated to the background. "Work- ing day and night to increase efficiency from 80 to 85 percent is an absurdity," he complained as he left the burdens of development, production, and sales to the managers at General Electric.33 Though the company retained his name for publicity purposes, Edison himself acted in the familiar capacity of contract inventor. Like the fairgrounds and circuses it lighted, the electrical industry in its early years was a place for wizardry. Edison, the inventive Wizard of Menlo Park, provided it. And like P. T. Bar- num, who ran the circus, Edison derived his success from a combination of cleverness, design, organization, and showmanship that critics derided as "humbug." "When an abnormal man can . . . make his name known all over the world . . . and accumulate such wealth with such little real knowledge," a former associate once marveled of Edison, "I say, such a man is a genius—or let us use the more popular word—a wizard. So was Barnum!"34 The words resound with the same mixture of disillusionment and admiration that a girl named Dorothy exhibited on discovering the true identity of another famous wizard of the era. Indeed, Menlo Park and West Orange had more in common with the mythical realm of Oz than with the massive reality of one of the era's burgeoning industrial cities—such as Pittsburgh, Pennsylvania, home of George Westinghouse.

Westinghouse: Inventive Engineer

"He did not appeal to me, even then, as being a wizard," a long- time colleague recalled of his early encounters with George West- inghouse, "but he seemed to be a plain human being with lots of initiative, with nerve to attempt difficult things, and money

32 "I'm going to be a business man, " Edison said in 1883; "I'm a regular contractor for electric lighting plants and I'm going to take a long vacation in the matter of invention. " Reich, The Making of American Industrial Research, 45. Significantly, Edison described himself as a contractor, not as a manufacturer. 33 Quoted in Passer, The Electrical Manufacturers, 104. 34 Francis Jehl, quoted in Hughes, American Genesis, 91. Steven W. Usselman I 268 enough to see them through to success or failure. He met my ideas of what an engineer should be."35 An engineer, not a wizard; from Pittsburgh, not Menlo Park or Manhattan: the distinctions express in shorthand fashion the key differences between Westinghouse and Edison and the two facets of the late nineteenth century economy that they represent. As with Edison, when contemplating Westinghouse one must first deal with his extraordinary ability to solve technical problems. Though remembered today primarily in connection with the electrical industry, Westinghouse made his reputation as a supplier of devices to the railroads.36 His air brake, introduced in 1869, soon became standard equipment on American passenger trains. By the end of the century, most freight trains used it as well. Westing- house also supplied some of the first practical electric railroad signals, and over the course of the late nineteenth century, he came to dominate that field. By 1890, when the country paraded its inventors in celebration of the centennial of the Patent Office, these accomplishments placed Westinghouse alongside Edison in the public consciousness.37 Yet to come were most of his many achievements in alternating current technology. Westinghouse pioneered the large electric generator installations at Chicago and Niagara Falls and along the way developed transformers, steam turbines, motors, meters, and many other critical components.38 In the absence of laboratory notebooks, letters, and other sources of the sort that Edison left at West Orange, we cannot say with certainty why Westinghouse enjoyed such success as an innovator. We will probably never have a biography of a Westinghouse invention. Indeed, in most cases we really cannot say how much credit should go to Westinghouse and how much to his associates. In discussing the transformer used with alternating current, Hughes passes over Westinghouse entirely and concentrates on William Stanley. Henry Prout, a sympathetic biographer, gives Westinghouse credit for setting Stanley to the task with clear

35 Quoted in Henry G. Prout, A Life of George Westinghouse (1921; Salem, N.H., 1972), 5-6. 36 Ibid., 21-86, and Steven W. Usselman, "Air Brakes for Freight Trains: Techno- logical Innovation on American Railroads, 1869-1900," Business History Review 58 (Spring 1984): 30-50. 37 The New York Times, 15 March 1891, 16, and 9 April 1891, 4. 38 Prout, Westinghouse, remains the best source on the inventor's activities pertaining to electrical technology. George Westinghouse and the Business of Innovation I 269 objectives in mind.39 Westinghouse took credit for creating the key component in his railroad brakes, the triple valve, apparently without serious dispute. Later he plunged into an emergency effort that resulted in the quick-action triple valve, which made air brakes suitable for long freight trains. Additional improvements probably owed quite a bit to others employed at the air brake company. The various signaling mechanisms and the many inventions pertaining to electric power likewise originated with the staffs of Westinghouse's companies. Difficulties of attribution should not, however, cause us to lose track of the contribution Westinghouse made or to avoid trying to make sense of it. The various inventions associated with his name and his companies clearly fit a pattern. They are the products of a common culture if not of a single mind, and certainly Westing- house had more to do with shaping that culture than anyone else. Former associates consistently described him as a man who exerted a strong presence over his enterprises. "In all [his] activities," wrote Prout, "Westinghouse had a constant part in executive conduct as well as planning and administration—perhaps a part too close and constant for the best results."40 By all accounts, Westinghouse possessed more than sufficient talents as a designer of machinery to establish himself as the dom- inant presence in any engineering organization. He showed exceptional talent for designing regulating devices that combined mechanical components and either fluid or gaseous pressure in some sort of feedback arrangement. Prout marveled over his fric- tion draft gear, a little-known device that eventually proved almost indispensable in operating heavy trains, and told how an embar- rassed Westinghouse designed it in short order after his braking system jolted passengers at a public trial.41 H. T. Herr, who managed several Westinghouse concerns and deemed his boss "a great mechanician," expressed similar admiration for an air spring that Westinghouse designed for automobiles. "He had a wonderful knowledge of and intuition for the proportions of a device of this kind, and could with little calculation, simply by good judgement of these proportions, have a splendid design produced."42 Another former employee, Albert Kapteyn, noted that Westinghouse never

39 Ibid., 104-10. 40 Ibid., 18. 41 Ibid., 77-86. 42 Quoted in ibid., 254. Steven W. Usselman I 270

Engineer's Brake Valve • This engraving, taken from an air brake instruction manual, provides a cut-away view of one of the complex mechanical How-control devices that typically regulated Westinghouse systems. (Reproduced from Westinghouse Company, Air Brake Instruction Guide [Wilmerding, Pa., 1901].) lacked for possible solutions to mechanical problems, "as if his brain was a storehouse of original ideas and as if he had only to take them out as wanted."43 "He always realized so completely the interrelation of cause and effect that it seemed as if, to him, the apparatus was made of glass," Kapteyn recalled, "and he worked with the greatest ease, as if playing.>>44 Herr caught something of the same sense of playful ease in Westinghouse's technical work.

43 Quoted in ibid., 308. 44 Quoted in ibid. George Westinghouse and the Business of Innovation I 271

"I have a good deal on my mind," Westinghouse once told him, "but I like to talk to you about these mechanical things. They relieve me."45 Just as Edison never long abandoned his chemical laboratory, Westinghouse never ventured far from the drafting table, foundry, and machine shop. His father owned a machine shop in Schenectady, New York, a town of machine shops, and by his own account Westinghouse spent most of his time there as a child.46 Once his early success with the air brake had ensured him a measure of financial independence, Westinghouse always maintained exceptional facilities for designing, casting, and machining complex devices. He lived in a world about which most mechanics could only dream. In a matter of days or even hours, Westing- house could have a crude sketch transformed into a working prototype, without leaving his desk. "We could make anything," recalled Herr; "Mr. Westinghouse never believed in a paper design."47 A one-time general manager of the brake company and president of the electric company recalled gleefully the time he received a rough sketch that Westinghouse had drawn at home late one Saturday night. By working on Sunday and getting to the foundry at the air brake company when it began operations at dawn the next day, the foreman managed to present a surprised Westinghouse with a finished casting of the device when he arrived at the electrical works on Monday morning. For the only time in his experience with Westinghouse, the manager had "succeeded in doing a piece of work for him quicker than he thought it could be done."48 The story reveals a great deal about the vibrant and demanding shop culture that Westinghouse personally fostered and maintained, even as his businesses expanded far beyond the confines of a single machine shop. The products generated in these shops bear a common stamp, which suggests that a strong guiding force was at work. Westing- house inventions typically exhibited two features. First, they involved transmission over distance. This aspect of his work is well known in the case of electric power, where transmission of high voltages over long distances gave alternating current its primary advantage over direct current. It appeared frequently in his other

45 Quoted in ibid., 253. 46 Ibid. ,5. 47 Quoted in ibid., 254-55. 48 Quoted in ibid., 105-6. Steven W. Usselman I 272

Air Brafce Car Equipment • Each car in a train equipped with air brakes had these components mounted on its underside. The all-important triple valve mediated the flow of air between the brake cylinder, the auxiliary reservoir, and the train pipe, which linked each car to the engineer's valve and to a compressor located on the locomotive. The patented hose coupling raised a significant barrier to competitors who hoped to mix their equipment with that of Westinghouse. (Reproduced from Westinghouse Com- pany, Air Brake Instruction Guide [Wilmerding, Pa., 1901].)

work as well. Westinghouse's first inventive triumph, the railroad air brake, utilized a pipe filled with compressed air to establish a continuous and direct connection between engineers and the brakes on each car of their trains. In similar fashion, his interlocking signaling systems used a combination of electricity and compressed air to connect signal operators directly with switches and signals located at considerable distances from their control towers. Even in his work on natural gas, which Westinghouse pursued more for entertainment than for profit, the challenge of transmission over a distance was apparently what intrigued the inventor.49 The second recurrent feature of Westinghouse's inventions becomes apparent only on close examination of particular devices. Many of the technologies that Westinghouse pursued involved a crucial linking mechanism that served to connect the long-distance transmission lines with the rest of the system. Often these devices incorporated feedback mechanisms that regulated the system. In alternating current electrical distribution networks, these critical links were the transformer, which stepped voltages up for transmission and down for use at the other end, and the rotary con-

49 On his activities with natural gas, see ibid., 224-29. George Westinghouse and the Business of Innovation I 273 verter, which connected alternating current transmission networks with direct current distribution lines. Each car in a train equipped with air brakes tapped into the network via the triple valve, a clever arrangement that Westinghouse and others always recognized as the heart of the system. Another complex valve, located in the cab of the locomotive and operated by the engineer, regulated the system at its front end. Westinghouse's signaling systems depended on a variety of triggering mechanisms that detected impulses sent by compressed air or electricity and responded with some sort of mechanical work, such as throwing a switch, moving a semaphore blade, or locking a switch lever. All of these crucial regulating devices were mechanical marvels—complex arrangements of parts, machined to fine tolerances, sensitive enough to detect subtle variations in electrical characteristics or pressure yet rugged enough to operate without fail when mounted under a railroad carriage or placed in other similarly demanding environments. This was Westinghouse's stock in trade as an inventor. He identified promising technologies (usually involving transmission), concentrated on the key appliances, and produced workable ver- sions of them in remarkably short order by drawing on a few core techniques or approaches. In this he exhibited several parallels to Edison. Hughes's concept of inventive style again seems applica- ble, and his label "master of energy transformations' applies as well to Westinghouse as to Edison. Yet for all these similarities, the two men also differed in fundamental and meaningful respects. Some of the difference may have stemmed simply from their technical orientations, with Edi- son inclined toward the electrical and chemical, whereas Westing- house gravitated always toward the mechanical. But the differences also involved matters of style or taste. Westinghouse seldom exhibited either the inventive playfulness that enabled Edison to turn out one clever amusement after another or the compulsive pursuit of technical perfection that sustained the Wiz- ard of Menlo Park's efforts to improve the phonograph. These two inclinations—the production of clever but seemingly useless amusements and the struggle to achieve abstract technical ideals— may at first appear to result from contradictory impulses. In fact, they share an important attribute: neither customarily leads to long-term financial success. Playful achievements attract attention at first, as in the case of incandescent lighting, but, as the novelty Steven W. Usselman I 274

AUTOMATIC SIACK ADJUSTER.

Two Views of the Automatic Slack Adjuster • This feedback arrangement, visible in the upper center of the previous air brake illustration, exhibits features characteristic of many Westinghouse inventions. A critical spring-and-ratchet locking mechanism (marked 2 and 3 in the upper engraving and pictured in detail below) regulated the slack in a train in accordance with the air pressure in the auxiliary reservoir, which var- ied as the brakes went on and off. Westinghouse made extensive use of similar devices in his signaling systems. (Reproduced from Westinghouse Company, Air Brake Instruction Guide [Wilmerding, Pa., 1901].) fades, more calculated economic considerations take over. Perfec- tion is a technician's indulgence, a conscious disregard for cost that at times may provide inspiration but can lead to financial disaster if left unchecked. Edison moved from one novelty to the next, George Westinghouse and the Business of Innovation I 275 always avoiding the long run, with enough success that he could afford the indulgence of the phonograph. Westinghouse, in sharp contrast, steadfastly found a middle ground. His creations seemed always directed toward a particular, concrete problem, his sights always fixed on the economic return for solving the problem. "Not one of [his] patents is a flash out of the blue sky or a vision on the horizon," noted his biographer Henry Prout. "Every one is calculated to meet a situation he has seen in his own practice . . . and no one of them was invented to sell or as a speculation."50 Invention as an act of creation in and of itself held little appeal for Westinghouse. Unlike Edison, Westing- house fell into few protracted disputes over who deserved credit for an invention, unless the question of priority threatened his patent control and thus his economic position. Edison often let his pride in his own creative abilities cloud his judgment about devel- opments that originated outside his own laboratories. Westing- house did not hesitate to buy the inventions of others if they moved him closer to a solution. And when he reached a remuner- ative solution, by whatever path, he stopped and implemented it. Westinghouse did not chase after technical perfection. He (or Stanley) improved the efficiency of the transformer enough to make it pay; he did not attempt to make the most efficient transformer possible. These qualities are what the colleague quoted earlier had in mind when he characterized Westinghouse as "my idea of what an engineer should be." To be an engineer was to be attuned to eco- nomics, readily able to accept financial constraints on technical possibilities. Professional engineers, just coming to prominence in the age of Edison and Westinghouse, thrived precisely in those settings, like the railroads, where a great deal had already been decided and worked out. Taking so much as given, they could quickly identify marginal improvements that would have economic significance when employed in a broad market context.51 Westing- house, even when operating in realms not yet so constrained, approached tasks in much the same fashion. "He was extremely

50 Ibid., 6. 51 On the characteristics of professional engineering, see Bruce Sinclair, A Centen- nial History of the American Society of Mechanical Engineers, 1880-1980 (Toronto, Ont, 1980); Edwin T. Layton, Jr., The Revolt of the Engineers: Social Responsibility and the American Engineering Profession (Cleveland, Ohio, 1971); and Steven W. Usselman, "Running the Machine: The Management of Technical Change on American Railroads, 1860-1910" (Ph.D. diss., University of Delaware, 1985), 228-342. Steven W. Usselman I 276 quick to see a situation and judge the possible merits of a device," remembered Herr.52 "Westinghouse was a thirty-day man," said another old associate. "The profits of the new idea or the new enterprise would begin to appear in about thirty days."53 This difference in approach between Edison and Westing- house clearly manifested itself in their attitudes toward manufacturing. Modern designers and engineers understand that one of the most critical and difficult stages in the development of a new product occurs when a prototype moves into production. Seldom does this process occur in the orderly, linear fashion that the phrase implies. In reality, product managers struggle almost con- stantly during the long course of innovation to meld design objectives with the realities of economical manufacturing. They fret over when to rein in the designers and how hard to push the manufacturing engineers. This is an art, though it often comes in the guise of science. Many firms delegate this ongoing balancing act to a "product engineer," a special breed of compromiser who in the- ory brings order to what is in fact an inherently messy endeavor.54 Long before anyone coined the phrase, Westinghouse exhibited an innate grasp of product engineering. Personally familiar with foundry and machine shop practice, he kept manufacturing considerations at the forefront of any project. Again the transformer provides the best-documented example. Westinghouse took the awkwardly designed transformer of Lucien Gaulard and John Gibbs and with his staff redesigned it, largely with a mechanician's eye for making the device more manufacturable. Westing- house "applied himself to the production of a piece of apparatus which could be wound on a lathe, discarding the unpractical sol- dered joints and stamped copper disks for the more commercial form of ordinary insulated copper wire."55 An assistant, Albert Schmid, built a transformer without insulating the iron plates in its core, because "pasting paper on the plates was highly objectionable as a manufacturing process."56 This alteration had the seren-

52 Quoted in Prout, Westinghouse, 255. 53 Quoted in ibid., 162. 541 A product engineer who moved many of IBM's early computer products from the design stage to the marketplace once told me that at the beginning of each assignment he would announce to the assembled team, "There comes a time when every project needs an S.O.B. I'm the S.O.B." 55 Prout, Westinghouse, 108. 56 Ibid., 109. George Westinghouse and the Business of Innovation I 277

Gaulard and Gibbs Transformer

Stanley Transformer

Westinghouse Transformer

Revising the Transformer for Production, 1883-1887' Westinghouse purchased rights to the Gaulard and Gibbs transformer, shown in this model as it appeared in 1883, with the two stacks of stamped copper discs and papered metal sheets that he found objectionable from a manufacturing standpoint. By 1886, William Stanley and others in Westinghouse's employ had considerably simplified the design, and the following year it appeared in a sleek form suitable for mass production. (Illustrations reproduced courtesy of the Smithsonian Institution, negative nos. 44274A, 79-9513-24, and 79-9513-22.) Steven W. Usselman I 278 dipitous effect of improving the transformer's electrical efficiency, but the impetus for the change came from manufacturing considerations. One can see this sensitivity to manufacturing elsewhere in Westinghouse's activities, in the obvious high regard in which he held his foundry workers, and in his own factories. The Westing- house companies always manufactured their own products, and their factories often pioneered new manufacturing techniques. The air brake production center near Pittsburgh, for example, attracted considerable attention from the engineering press for its continuous casting methods.57 Westinghouse's giant electrical equipment production facility in England was widely regarded as one of the most advanced manufacturing complexes in Europe.58 Edison emerged from the same machine shop culture as West- inghouse, but his experiences there apparently proved more a detriment than a benefit to his efforts at manufacturing. In electrical power, Edison never made the transition into anything that approached standard production.59 He built custom products for a few years, then acted as a contract inventor to General Electric as it struggled to bring some order to the business. Unwilling or unable to set up his own facilities for manufacturing electrical equipment in Europe, Edison licensed others, then watched as the licensees used their expertise in manufacturing to integrate backward and to develop research capabilities that helped them take control of the business.60 Outside electric power, Edison went to considerable effort to manufacture his own products, but Millard's close examination of his enterprises reveals that they often foundered on the problems of product engineering.61 The

57 David A. Hounshell, From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States (Baltimore, Md., 1984), 240. 58 Prout, Westinghouse, 264-69. 59 Production of light bulbs constituted something of an exception. Edison designed equipment to produce them and achieved substantial economies as volume increased. Even then, though, the production facilities retained some of the character of a craft shop, with over two hundred pumps employed to evacuate the bulbs. Ibid., 89 and 130, and Passer, The Electrical Manufacturers, 92-95. 60 Millard, Business of Innovation, 123, and Hughes, Networks of Power, 47-78 and 175-200. 61 When Edison formed Thomas A. Edison, Incorporated, in 1901, ostensibly with the intention of placing greater emphasis on manufacturing, the effort resulted in "a production engineer's nightmare: a do-all general purpose factory, with no central task or stabilized engineering designs, and few long production runs." Millard, Business of Innovation, 201. George Westinghouse and the Business of Innovation I 279 storage battery moved into production so prematurely that subsequent recalls virtually bankrupted the inventor. Other products languished in the works while Edison repeatedly changed their designs in efforts to match every technical feature his competitors offered.62 These differences in approach to manufacturing and to enterprise in general no doubt reflected basic differences in tempera- ment. Edison had remarkable powers of concentration and could perform extraordinary feats of endurance in order to produce a workable product quickly, but he lacked the discipline required to follow through.63 Whereas Edison lacked discipline, Westinghouse projected it. Asked to explain his own success, the Union Army veteran cited his early exposure to machines and the "lessons of discipline to which a soldier is required to submit, and the acquirement of a spirit of readiness to carry out the instructions of superiors."64 In photographs, Edison appears to have cultivated dissheveled- ness. We view him slumped behind a table in the company of fellow shopmen or leaning against a workbench, dressed in baggy clothes and worn shoes, with unkempt hair flying in several direc- tions above his dreamy eyes. In his publicity photo, Westinghouse sits tall and straight, shirt and coat stuffed with his barrel chest, whiskers and walrus mustache neatly trimmed, gaze fixed weight- ily on the middle distance. One might easily mistake him for Grover Cleveland, that very embodiment of presidential author- ity. Like Cleveland, Westinghouse possessed the countenance of a man the public might entrust with some weighty but delicate matter, and indeed the two served together as receivers for the fraudulent and publicly discredited Equitable Insurance Com- pany.65 Whether he traced their origins accurately or not is open to question, but one cannot long ponder Westinghouse's career with-

62 "Edison never did grasp the concept of good enough in the process of handing over a prototype to the works," Millard concludes. Ibid., 78. 63 "Edison's ability lay in starting things, concludes Millard, "not in finishing them. The history of the lab was littered with half-finished projects that had not held his attention long enough." Ibid., 318. 64 Quoted in Prout, Westinghouse, 5. 65 "He reminds me in a way of John Adams," wrote Charles Francis Adams, Jr., who had a long association with Westinghouse and sat on the board of his electrical company, "in essentials a really great man but cursed with a vanity which limits him in every direction." Quoted in Edward Chase Kirkland, Charles Francis Adams, Jr., 1835-1915: The Patrician at Bay (Cambridge, Mass., 1965), 176. Steven W. Usselman I 280

Thomas A. Edison in His Laboratory at West Orange, 1906 "(Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edi- son National Historic Site, negative no. 6164.) out agreeing that discipline and endurance had a great deal to do with his accomplishments. Nothing demonstrates this more clearly than his experiences with the railroads. As a very young man, with no prior experience in business, Westinghouse found himself selling equipment to American railroads. Facing a situation with few parallels in the American economy at the time, he triumphed as no one else did. In the process, Westinghouse exhibited nearly all of the traits and business practices that he would later utilize in the electrical industry. Just as Edison must ultimately be understood in the context of the urban market for novelty, one cannot fully comprehend Westinghouse without considering the market for railroad technology. George Westinghouse and the Business of Innovation I 281

George Westinghouse, Jr., c. 1906' (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7924.)

Westinghouse and the Railroads

"Perhaps some Thomas A. Edison might have become a railroad executive," wrote Thomas Cochran in his masterful study of late nineteenth century railroad managers, "but had he done so it is not clear that he could have gained any great competitive advantage for his company. '>e6 Cochran raised this hypothetical situation as a conclusion to a brief chapter entitled "Innovation," which offered the simple and deceptively persuasive thesis that railroad management had little interest in the subject. Managers desired

66 Thomas C. Cochran, Railroad Leaders, 1845-1890: The Business Mind in Action (Cambridge, Mass., 1953), 147. Steven W. Usselman I 282 above all to bring order and control to their vast, highly capitalized lines, Cochran explained. They needed a more predictable approach to the technologies they already had, not more novelty. Innovation came in areas such as standardization, corporate organization, and cost accounting, while the hardware of railroad technology stayed basically the same. The argument is deceptive not in its spirit, which accurately captures the ideology of railroad management, but in its failure to account for the extraordinary technical change that did occur. American railroads at the close of the nineteenth century looked vastly different than they had at mid-century. The basic technologies retained their recognizable shapes and forms, but their scale had increased dramatically. Locomotives of much greater power pulled longer trains of cars, each carrying several times more tons of freight than those of an earlier generation, over steel rails that in places weighed three times as much as the typical iron rail of Civil War vintage. As railroads sent more and more of these behe- moths over their most important routes, they built huge maintenance facilities, switchyards, and terminals and devised countless methods for utilizing such facilities more intensively. In effect, railroads replaced an early, crude machine with one of much greater power and ran the new one harder than the old.67 This quiet technological revolution mobilized an army of mechanics and engineers and absorbed a significant portion of the nation's innovative energies. Engineering schools organized around the problems the railroad industry posed; countless metallurgists and chemists studied the new alloys, lubricants, and fuels it required; the steel industry developed in service to its demands; and the ledgers of the Patent Office swelled with devices invented for the railroads.68 Yet, as Cochran perceived, these efforts did not in general produce heroic innovators. Change appeared to flow almost effort- lessly and uneventfully from a relentless pursuit of lower operating costs within a highly ordered environment. Viewing innovation as a means rather than as an end, as a tool necessary for solving problems, not as an intrinsic source of competitive advantage and profit, railroads fostered a cooperative technical effort on which all

67 Albert Fishlow, "Productivity and Technological Change on American Railroads, 1869-1900," in National Bureau of Economic Research, Output, Employment, and Productivity in the United States after 1800 (New York, 1966), 583-646. 68 Usselman, "Running the Machine." George Westinghouse and the Business of Innovation I 283 companies could freely draw. They readily joined interfirm technical organizations and hired more of the professional engineers who functioned comfortably within them. These moves hastened the development of an outlook that viewed innovation as the product of sustained analysis and incremental problem-solving, not as bursts of novelty. With the same objective in mind, railroads formed associations that pooled patents in their possession and worked in concert to defeat the claims of patent holders against them. Sanctioned by the Supreme Court, these associations largely removed the patent system and its grants of monopoly for technical novelty from consideration in the railroad industry.69 This was, indeed, no place for Thomas Edison. Yet George Westinghouse somehow managed to maintain his identity and to build two enterprises that for decades supplied railroads with novel, patented devices. How did he do it? The answer is complex, but it is worth examining in some detail. It provides a rare glimpse of Westinghouse in action, one that helps draw out the differences between these two paragons of nineteenth-century innovation and that suggests why they came to play such different roles in the emergent electrical industry. One important factor in Westinghouse's success was that he addressed safety, the aspect of railroading where technical novelty most mattered. In this arena, railroads faced pressures that did not ordinarily apply in their technical affairs. The public—passengers, legislators, union members— demanded safety, and they placed great hopes in the potential of technical novelties to provide it. Inventors responded with innumerable designs for brakes, cou- plers, fire-proof lights and heaters, signals, and other "safety appliances" that might reduce casualties. Railroads argued that safety followed from relentless pursuit of routine operational efficiency and pointed to the improved casualty-mileage ratios obtained with heavier trains. But in an age of technical wizardry, the public was repeatedly drawn toward miracle inventive remedies. Pressures to experiment with safety appliances ebbed and flowed with reports of accidents, but they never dissipated entirely, and eventually a railroad would relent and try one device or another. When the

69 Steven W. Usselman, "Patents Purloined: Railroads, Inventors, and the Difliision of Innovation in Nineteenth Century America," Technology and Culture 32 (1991): 1047-76. Steven W. Usselman I 284 public got wind of the trial, often through the pioneering firm's advertising, other roads felt compelled to follow or risk appearing unsafe or indifferent.70 Such considerations figured prominently in Westinghouse's two areas of triumph. When the inventor negotiated his first sales of air brakes to the Pennsylvania Railroad, just two months after their initial trial, he informed J. Edgar Thomson that "the Chicago and North Western and Michigan Central Railroad Companies have already adopted it, and other Western Roads will probably do the same, with a view of making its use a feature in their advertising material."71 The Burlington's Robert Harris, who soon became the most enthusiastic supporter of the Westinghouse brake among executives in the West, also recognized the public relations value of early adoption. "I have no doubt that it will be made a subject of reference in advertisements," he wrote when persuading the manager of a Burlington subsidiary to adopt air brakes, "and that whether the travelling public would really be more safe or not, they would think so."72 Westinghouse derived additional benefits from the public's concern when an organized movement for railroad safety coalesced and lobbied for political action to protect employees. With few exceptions, railroads adopted air brakes for freight service only after public pressure had resulted in federal legislation that mandated their use.73 Widespread use of automatic electric block signals similarly followed extensive congressional inquiry into their potential.74 Public interest in safety devices opened opportunities for pur- veyors of technical novelties, but in order to capitalize on those opportunities Westinghouse had to proceed in a very different fashion than Edison. In supplying the telegraph company and

70 Steven W. Usselman, "The Lure of Technology and the Appeal of Order," Busi- ness and Economic History, 2d ser. 21 (1992), and Charles Hugh Clark, "The Railway Safety Movement in the United States, 1869-1893" (Ph.D. diss., University of Illinois, 1966). The archives of the Chicago, Burlington and Quincy Railroad, located at the Newberry Library, Chicago, 111. [hereaftre, CBQ Papers], contain numerous examples of executives inquiring into the practices of other lines before taking action on prospective safety devices and several references to the use of safety in advertising. 71 George Westinghouse, Jr. to E. H. Williams, 13 Nov. 1869, and David H. Williams to J. Edgar Thomson, 12 Dec. 1869; Board Papers of the Pennsylvania Rail- road [hereafter, Board Papers], Pennsylvania Railroad Papers, Hagley Museum and Library, Ace. 1807 [hereafter, PRR Papers]. 72 R. Harris to C. E. Perkins, 25 April 1870, CBQ Papers, 3H4.1, 20:26-27. 73 Usselman, "Air Brakes." 74 Annual Reports of the Block Signal and Train Control Board of the Interstate Commerce Commission, 1908-1910 [hereafter, ICC Signal Board Reports]. George Westinghouse and the Business of Innovation I 285 urban businesses with his wondrous devices, Edison dealt directly with consumers who valued novelty. To reach the ultimate sources of enthusiasm for his products—the traveling public and the endangered workers—Westinghouse had to pass through the mediating agency of the railroads, which viewed novelty as a nui- sance that interfered with the ordinary pursuit of safety through order. Unlike most of Edison's customers, moreover, railroads possessed extensive technical expertise. If an innovation proved irresistible, they had the ability to refine and manufacture it on their own. Even when railroads relied on products manufactured by others such as locomotives and steel rails, they often used their influence as knowledgeable, high-volume consumers to dictate technical specifications. In dealing with such experienced and sophisticated consumers, Westinghouse enjoyed one advantage. Both his brakes and his signals utilized recently emergent technologies that fell outside the usual expertise of railroads. Westinghouse's automatic brakes operated with compressed air, whose use at the time was confined to a few major civil engineering works such as the Mt. Cenis Tun- nel and the Brooklyn Bridge. Though mechanics at several railroads had experimented for years with brakes that also would have given engineers direct control over their trains, they had pursued avenues that relied on springs, levers, and other mechanical connections.75 Railroads knew so little about compressed air that Westinghouse had to provide training cars to explain how to operate and maintain his brakes.76 Westinghouse made some use of compressed air in his early signaling systems as well, but the critical breakthrough in this area came from the application of electricity. Aside from the telegraph systems running along the tracks, railroad operators had little direct experience with electricity. Responsibility for the telegraph, moreover, usually fell to a contractor. Even the most technically sophisticated companies, such as the Pennsylvania and the Burlington, kept only one electrical

75 For some examples, see the Papers of John Work Garrett, Maryland Historical Society, Baltimore, MS 2003, box 82, subject 7130, and the letters of Robert Harris, CBQ Papers, 3H4.1. One exception to the preponderance of mechanical arrangements, devised by the Burlington's superintendent of the telegraph with the assistance of an outsider named Ohmsted, utilized electromagnetism. R. Harris to F. H. Tubbs, 17 June 1868, CBQ Papers, 3H4.1, 12:501; to Mr. Hitchcock, 23 Dec. 1868, CBQ Papers, 3H4.1, 14:192; and to Whom It May Concern, 29 March 1869, CBQ Papers, 3H4.1, 15:323. 76 "Air Brake Instruction Cars," Santa Fe Employees' Magazine 1 (July 1907): 197. Steven W. Usselman I 286 expert on their staffs.77 With such limited knowledge, railroads had little hope of devising alternatives to the Westinghouse systems. By bringing innovative techniques to matters of popular interest, Westinghouse caught the railroads at their most vulnerable point, but in achieving and maintaining positions of dominance in both fields he had to draw on business methods that involved far more than technical virtuosity. Westinghouse began to develop business acumen out of necessity from the start of his career as an inventor. His first professional invention, a "frog" designed to keep trains from derailing at junctions, slipped immediately into the pool of anonymous railroad innovations. When Westinghouse introduced his air brake a few months later, railroads tried in their customary fashion to drag it out of the inventor's grasp as well. The Pennsylvania, always quick to recognize the potential of a new technology and supremely confident of its own abilities to master it, purchased a few brakes and then asked Westinghouse for a license to manufacture them. The inventor refused. He would grant no licenses, Westinghouse explained in a letter to executives at the Pennsylvania, because he wished to maintain uniformity in his system. Uniformity would be essential, he noted, so that railroads could interchange equipment with brakes.78 In making this argument, Westinghouse deftly melded his own self-interest with the concerns of railroad executives. Robert Harris made the same point about uniformity when seeking permission from his directors to buy air brakes for the Burlington.79 Providing for uniformity would prove an important obstacle to the use of air brakes in freight service.80 But in 1869, when air brakes

77 On electrical experts, see Minutes of the Meetings of the Board of Directors, May 17, 1857 and 25 June 1877, PRR Papers, and H. B. Stone to John Clancy, 31 Oct. 1889, CBQ Papers, 3H5.24. Mechanics at the Burlington often showed little trust, or understanding, of devices that made use of electricity. For an example involving electric interlocking signals, see C. E. Perkins to H. B. Stone, 18 March 1882, CBQ Papers, 3P6.21, and H. B. Stone to T. J. Potter, 27 March 1882 and 25 April 1882, CBQ Papers, 3P6.21. When Westinghouse added an electrical activating mechanism to his braking system during the famous brake trials at Burlington in 1886, the railroad technical press chastised him for using a technology with which railroads could not be expected to have any familiarity. For reaction to the electric brakes, see weekly cover- age of the Burlington brake trials in Railroad Gazette and Railway Age, April through June 1887 and the Annual Report of the Master Car-Builders' Association for 1887. 78 George Westinghouse, Jr., to E. H. Williams, 13 Nov. 1869, and David H. Williams to J. Edgar Thomson, 12 Dec. 1869; Board Papers, PRR Papers. 79 R. Harris to J. F. Joy, 16 Nov. 1870, CBQ Papers, 3H4.1, 21:513-514. 80 Usselman, "Air Brakes." George Westinghouse and the Business of Innovation I 287

Westinghouse's First Factory, Pittsburgh, Pa., c. 1875'This artist's rendition accurately captures the scale and location of the operations, but misses the gritty vital- ity of the place. The perspective is approximately that which one would have attained from the yards and roundhouse of the Pennsylvania Railroad, scene of extensive dam- age during the strikes of 1877. (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7930.) could fill the vast, untapped market of passenger service, in which little interchange occurred, Westinghouse certainly had more in mind than easy exchange of equipment. He sought to retain control over his invention. Westinghouse assumed, quite reasonably given the ample evidence provided by other examples of railroad innovation, that licenses would lead to diversity of equipment. As railroads gained first-hand experience with manufacturing brakes, they would also acquire the understanding necessary to alter their design. As expertise gravitated from his own shops to those of the railroads, as his customers patented their own refinements, control would slip from Westinghouse's hands. Westinghouse would not let this happen. He sold complete brakes at a fixed price and granted no rebates, to an industry in which rebates were exceed- ingly common.81 Pressured by public opinion, railroads complied with these terms, but even as they did so they searched for alternatives that would undermine Westinghouse's control. "Do you use Westing- house,'' Harris inquired of a mechanic at the neighboring Chicago and Alton Railroad, "and can you make any improvement upon his apparatus without his permission and cooperation?"82 Harris asked lawyers at the Western Railroad Association, a cooperative organization that handled business involving patents, to look into the

81 Documents in the manuscript collections of railroads I have studied consistently quote a price of $325 per locomotive and $100 per car between 1869 and 1875. 82 R. Harris to J. R. Reniff, 15 July 1875, CBQ Papers, 3H4.1, 37:330. Steven W. Usselman I 288

matter and offerred to give the mechanic's arrangement a trial.83 At the Philadelphia and Reading, master mechanic and general manager John Wootten solicited opinions from the Pennsylvania and other eastern roads and submitted a full report on alternative automatic brakes to the company president.84 After some prelimi- nary experiments, the Reading obtained rights from the Smith Brake Company to manufacture vacuum brakes, and by January 1874 it had placed them on nine locomotives and thirty-seven cars.85 "We are not putting any new air brakes on passenger trains now," Wootten notified his superior. Then, revealing his ultimate objective, he added, "we have been recently experimenting with a vacuum brake of our own design. "86 Vacuum brakes posed a serious threat to Westinghouse.87 The Massachusetts Railroad Commission, headed by Charles Francis

83 R. Harris to J. B. Reniff, 7 Aug. 1875, CBQ Papers, 3H4.1, 37:495 and 21 Oct. 1875, CBQ Papers, 3H4.1, 38:255. Harris put the steam braking system of one S. N. Goodale on a par with Westinghouse and noted that neither was "perfect beyond possible improvement." R. Harris to F. E. Sickels, 3 Feb. 1873, CBQ Papers, 3H4.1, 30:174. Goodale had offered his brake for trial to the B&O in 1871. See Garrett Papers, box 82, subject 7130. 84 J. E. Wootten to G. Clinton Gardner, 4 June 1872, Papers of the Philadelphia and Reading Railroad [hereafter, Reading Papers], Hagley Museum and Library, Ace. 1451, Letterbook 966, pp. 671-72; J. E. Wootten to H. L. Brown, 10 June 1872, Read- ing Papers, Letterbook 966, p. 693; J. E. Wootten to H. L. Brown, 20 June 1872, Reading Papers, Letterbook 971, p. 34; and J. E. Wootten to Franklin Gowen, 24 June 1872, Reading Papers, Letterbook 971, pp. 49-55. 85 J. E. Wootten to Franklin Gowen, 9 Dec. 1872, Reading Papers, Letterbook 975, p. 1; J. E. Wootten to R. E. Ricker, 30 Dec. 1872, Reading Papers, Letterbook 975, p. 89; J. E. Wootten to Franklin Gowen, 3 Jan. 1873, Reading Papers, Letterbook 975, p. 260; and H. F. Kenney to G. A. Nicolls, 29 Jan. 1874, Reading Papers, Air Brake File. The Reading began using vacuum brakes in regular service in February 1873. Accord- ing to statistics Kenney provided from September 1872, the Reading had placed air brakes on only ten of its locomotives and forty-two of its cars. On adoption of the West- inghouse brake at the Reading, see J. E. Wootten to Morris Sellers, 28 June 1871, Reading Papers, Letterbook 966, p. 12; J. E. Wootten to C. M. Cresson, 9 Aug. 1871, Reading Papers, Letterbook 966, p. 50; Mr. Nicolls to J. E. Wootten, 5 Dec. 1871, Reading Papers, Letterbook 704, p. 389; J. E. Wootten to Mr. Nicolls, 6 Dec. 1871, Reading Papers, Letterbook 966, p. 231; J. E. Wootten to Mr. Nicolls, 7 Dec. 1871, Reading Papers, Nicolls in-letters; Nicolls to J. E. Wootten, 9 Dec. 1871, Reading Papers, Letterbook 704, p. 411; and J. E. Wootten to Ralph Bagaley, 20 Dec. 1871, Reading Papers, Letterbook 966, p. 253. 86 J. E. W. to G. A. Nicolls, 27 Jan. 1874, Reading Papers, Air Brake File. Empha- sis added. 87 Instead of compressing air and reducing the pressure to activate the brakes, this system created a vacuum and used the pressure of the atmosphere to power the brakes. Vacuum brakes provided the same performance features as air brakes and seemed likely to require less maintenance, since they operated at lower pressure. In Europe, where vacuum brakes would become the standard, railroads showed a preference for the low- pressure system almost immediately. George Westinghouse and the Business of Innovation I 289

Adams, Jr., conducted a comparative trial of the two systems on the Eastern Railroad in April 1873.m The vacuum system apparently impressed many New England roads, for in November 1874 Wootten heard from Isaac Hinckley, president of the Philadelphia, Wilmington, and Baltimore Railroad, that "the Boston and Maine, the Boston and Albany, and the Grand Trunk . . . have discarded the Westinghouse and adopted the Vacuum."89 Even Robert Har- ris, who had just equipped the Burlington's entire passenger fleet with Westinghouse air brakes, appeared on the brink of conver- sion. "I look for great results from the vacuum brake—greater even than from the Westinghouse," he wrote in November 1873, just prior to arranging for Smith's agent to conduct a trial on one of his trains.90 By 1874, then, American railroads appeared poised to circum- vent Westinghouse as they had so many other inventors. Yet in little more than another year's time, the vacuum brake was a dead letter in the United States, and virtually all passenger trains had air brakes. Westinghouse accomplished this reversal primarily through a relentless patent fight. The inventor had built up a for- midable array of patents, including a basic one covering continuous brakes operated by compressed air, which he could plausibly argue encompassed the vacuum principle. Whenever railroads expressed interest in vacuum brakes, Westinghouse appeared with threats of infringement suits. When Wootten first inquired about vacuum brakes in December 1872, Smith and his agent admitted that they were not "sure about the validity of their patents."91 That very day, Westinghouse sent word he would drop by to speak with executives at the Reading.92 A year later Harris reneged on his plan to try the Smith brake when, three days after he agreed to the test, "Westinghouse stopped by ... and warned that if we try the vacuum, even experimentally, he will bring suit."93

88 Westinghouse Air Brake Company, printed circular announcing trial, copy in Reading Papers, Air Brake File. 89 Isaac Hinckley to J. E. Wootten, 9 Nov. 1874, Reading Papers, Nicolls in-letters. Hinckley claimed that these companies saved over 50 percent in maintenance costs by switching to the vacuum brake. 90 R. Harris to J. N. A. Griswold, 29 Nov. 1873, CBQ Papers, 3H4.1, 32:549, and R. Harris to R. E. Ricker, 20 Dec. 1873, CBQ Papers, 3H4.1, 33:78. 91 J. E. Wootten to Franklin Gowen, 9 Dec. 1872, Reading Papers, Letterbook 975, p. 1. 92 J. E. Wootten to Franklin Gowen, 9 Dec. 1872, Reading Papers, Letterbook 971, p. 687. 93 R. Harris to R. E. Ricker, 23 Dec. 1873, CBQ Papers, 3H4.1, 33:92. Steven W. Usselman I 290

When railroad executives persisted in obtaining vacuum brakes, Westinghouse offered to supply them more cheaply himself, all the while insisting that the air brake outperformed its rival. "Mr. Westinghouse offers, if we decide upon the use of the Vacuum Brake, to furnish it at a much lower rate than the Smith Brake," Wootten reported.94 The inventor shortly thereafter sent the Reading a printed invitation to the trial conducted by the Massachusetts Railroad Commission.95 An exasperated Harris, who still wished to try a vacuum brake system and arranged for Westinghouse to provide one in the summer of 1874, could not resist lecturing his reluctant supplier. "What one should not do must sometimes be proven by experiment as well as what one should do," he wrote in apparent rebuttal to Westinghouse's unso- licited advice to forgo the trial. "We get most of our knowledge by paying for it, and in this light the investment in the vacuum brake will not be 'thrown away!' "m Westinghouse met enough resistance from Harris and other railroad managers that in early 1875 he purchased the Smith company and its patents.97 This action abruptly terminated diffusion of the vacuum device. The Master Car-Builders' Association, deter- mining that a test of two appliances manufactured by a single firm would have no meaning, abandoned its plans to conduct a comparative trial of the two braking systems.98 The following year West- inghouse conducted his own comparison, declared the air brake superior, and discontinued production of vacuum brakes.99 He had secured a monopoly over a technology that most Americans had come to consider indispensable for railroad passenger service. With this triumph, Westinghouse occupied a position in some ways remarkably similar to that enjoyed by Thomas Edison, who had recently sold his multiplex telegraph to Western Union. Not yet thirty years old, each had achieved a spectacular inventive success and secured a measure of financial independence most mechanics could not imagine. Yet despite the similarities, West- inghouse and Edison had already traversed quite different paths,

94 J. E. Wootten to Franklin Gowen, 30 Jan. 1873, Reading Papers, Letterbook 975, p. 260. 95 Copy in Reading Papers, Air Brake File. 96 R. Harris to Geo. Westinghouse, Jr., 26 Aug. 1874, CBQ Papers, 3H4.1, 34:503- 504. 97 Railroad Gazette 7 (6 Feb. 1875): 36. 98 Annual Report of the Master Car-Builders' Association for 1875. 99 Railroad Gazette 8 (14 April 1876): 159-61 and (21 April 1876): 176. George Westinghouse and the Business of Innovation I 291 and their formative experiences had left distinct legacies. In supplying an enthusiastic telegraph industry with the multiplex device, Edison had encountered little of the resistance Westing- house had met from the railroads. The strategies that Westing- house had employed in response—the use of public trials to gain leverage, the appeals to uniformity, the rigorous attention to patents and relentless defense of his rights—were still largely fo have reduced the value of these items to 14 percent of their acquisition costs. Since the schedules employed here are flat rates, they decelerate over time (5 percent in the first semester, 4.75 percent in the second, 4.5 in the third, etc.). Although a depreciation schedule such as this mathematically cannot depreciate all the way to zero, it has several advantages. First, it means that it is not necessary to calculate separate depreciation schedules for equipment placed into service in differenttion to a rich education, the experience had left him with a valuable collection of patents and a fully integrated enterprise for manufacturing and marketing railroad brakes. This enterprise provided Westinghouse with the same sense of liberation from financial constraint that inspired Edison to launch an invention factory, but it also brought certain obligations and commitments. Like Edison, Westinghouse spent much of the next decade exploring new opportunities. He purchased the essential patents and launched the enterprise that would secure his position in the electric power business. But all the while, he continued to build the brake company and to expand his involvement with the railroads, pursuing strategies of vertical and horizontal integration worthy of the admiration of his Pittsburgh neighbor, Andrew Car- negie. As his mechanics introduced techniques that made the air brake factory a model of volume manufacturing, Westinghouse sought to expand his market. He spent considerable time overseas selling brakes to European railroads, and at home he kept his company positioned to capture the massive market for freight train brakes.100 Westinghouse rebuffed efforts by the railroad patent associations to overturn his patent covering a hose coupling, which kept railroads from mixing brakes manufactured by others into the Westinghouse system.101 Throughout extended negotiations with

100 For a variety of reasons, few railroads had placed air brakes on their freight equipment. See Usselman, "Air Brakes." 101 Annual Report of the Executive Committee of the Eastern Railroad Association 22 (1888): 27. 1

(S3 CO IS3

The New Air Brake Factory, Wilmerding, Pa., 1890' As he struggled to secure the market for freight train brakes, Westinghouse moved the air brake company a few miles east of central Pittsburgh to a rural spot along Turtle Creek, which fed into the Monongehela River near Andrew Carnegie's massive Homestead steel works. The footbridge at the lower right, in front of the office, carried workers over the main line of the Penn- sylvania Railroad to a precisely planned company town. (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7932.) George Westinghouse and the Business of Innovation I 293 the Burlington and the Pennsylvania, he still refused to issue licenses or reduce prices.102 Then, when the Burlington and the Master Car-Builders' Association conducted a nationally publicized series of trials of various freight brakes on the expiration of his basic patents in 1886, Westinghouse managed to emerge in a stronger position. He extended his control over air brake technology by patenting some key modifications necessary to prevent shocks when stopping long freight trains during emergencies. Pub- licity generated by the trials, moreover, sparked a movement for employee safety that culminated in 1893 with federal legislation mandating continuous brakes for freight trains. For several years, competitors joined Westinghouse in a battle reminiscent of the one he had fought over the passenger trade fifteen years before. This time Westinghouse lacked a patent comparable to that for the hose coupling, which in the earlier fight had forced railroads to choose between his system and another. One clever supplier, the New York Air Brake Company, conducted a public demonstration of a fifty-car train equipped with some of its own brakes and some of Westinghouse's design. In 1891 the Bur- lington replicated the experiment and subsequently ordered at least a thousand brakes from the New York firm at $35 apiece, $10 less than Westinghouse charged. Though he was deeply involved at the time with alternating current, Westinghouse promptly engaged in an extensive personal correspondence with the managers who had made the decision. He insisted that no other appliances could operate effectively in conjunction with his equipment and accused his rival of having rigged the trial by tampering with the valves. When the Burlington duplicated the results, Westing- house suggested that the New Yorkers had supplied a special lot of equipment and that subsequent shipments would not match it in quality. The railroad persisted, and finally Westinghouse reminded its managers that he had suits pending against the New York Air Brake Company and other manufacturers for infringing his patents.103 As before, the inventor deftly combined technical

102 On negotiations between Westinghouse and the Pennsylvania, see Minutes of the Meetings of the Committee on Supplies, May 1879 through August 1880, accom- panying Minutes of the Meetings of the Board of Directors, PRR Papers. On similar negotiations at the Burlington, see Usselman, "Air Brakes." 103 Godfrey Rhodes to C. M. Higginson, 18 Sept. 1891, CBQ Papers, 3R2.1; Geo. Harris to C. E. Perkins, 19, 21 Sept. 1891, CBQ Papers, 3P4.51; Geo. Harris to T. S. Howland, 28 Sept. 1891, CBQ Papers, 3P4.51; Geo. Harris to C. E. Perkins, 3 Oct. 1891, CBQ Papers, 3P4.51; H. H. Westinghouse to C. E. Perkins, 7 Dec. 1891, CBQ Steven W. Usselman I 294

The Foundry at Wilmerding, 1890 • This facility, visible at the far right in the illustration of the new air brake factory, housed one of the most sophisticated casting operations of its day. The eight vertical chutes carried sand down to the molders. Behind them circulated a continuous casting line, depicted in Scientific American (see illustration on the back cover of this Business History Review). (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7926.) competence (several months later, the Burlington requested that the New York Air Brake Company replace the valves on all its products) with extraordinary vigilance and prompt threats of infringement suits. His brake was the safe choice, and though

Papers, 3P4.51; Godfrey Rhodes to Geo. Harris, 10 Dec. 1891, CBQ Papers, 3P4.51; C. E. Perkins to Geo. Harris, 11 Dec. 1891, CBQ Papers, 3P4.1, 31:240; C. E. Per- kins to Geo. Westinghouse, 11 Dec. 1891, CBQ Papers, 3P4.1, 31:241; Geo. Westing- house to C. E. Perkins, 14 Dec. 1891, CBQ Papers, 3P4.51; Godfrey Rhodes to Geo. Harris, 14 Dec. 1891, CBQ Papers, 3R2.1; Mr. Quereaux to Mr. Forsyth, 24 Dec. 1891, CBQ Papers, Lab Books, A10:325-331; Geo. Harris to C. E. Perkins, 28 Dec. 1891, CBQ Papers, 3P4.51; and Godfrey Rhodes to Geo. Harris, 26 Jan. 1892, CBQ Papers, 3R2.1. George Westinghouse and the Business of Innovation I 295

Westinghouse refused to compromise on issues of price and licens- ing, railroads that purchased brakes during the 1890s overwhelm- ingly chose it.104 By then, Westinghouse had begun to enjoy some success in selling signals to the railroads. Though not so well documented as his activities with the air brake, in its broad outlines Westing- house's conduct of the signaling business provides further insight into his inclinations as an innovator and businessman. And once again, they reveal sharp contrasts with those of Edison. The move into signaling had all the elements of a classic effort to diversify within an established market. Westinghouse embarked on the venture during the interim when most railroads had adopted air brakes for passenger service but few had purchased them for freight trains. Like braking, signaling posed an obvious avenue for improving passenger safety. In Britain, where Westing- house had spent considerable time selling brakes, railroads had tried a variety of signals in an effort to cope with their dense traf- fic. Though American roads typically carried less volume, colli- sions routinely sparked discussion of the need for devices that would automatically prevent more than one train from entering the same crossing or stretch of track. Since compressed air offered one of the few available means of powering a signal arm or switch at a distance, Westinghouse could utilize his established technical expertise. One could readily draw analogies between a pneumatic signal installation located along a stretch of track and the air brake equipment mounted on a train. As in the case of brakes, Westinghouse from the start used the patent system to secure a stronghold in the signaling business. In 1881 he acquired rights to a fundamental patent governing electric circuits that ran through railroad track and utilized trains to activate signals.105 Unlike earlier track circuits, Westinghouse's moved the signals to the stop position if the current failed. Since few railroads had bought air brakes until he had incorporated a similar fail-safe arrangement, Westinghouse surely understood the importance of this feature. For about a decade, possession of the

104 Statistical Reports of the Interstate Commerce Commission, 1893-1901. 105 Signal Section of the American Railroad Association, The Invention of the Elec- tric Track Circuit (New York, 1922); Mary Brignano and Hax McCullough, The Search for Safety: A History of Railroad Signals and the People Who Made Them (Swissvale, Pa., 1981); and Union Switch and Signal Company (F. S. Guerber, agent) to T. J. Pot- ter, 23 Aug. 1881, CBQ Papers, 3P6.21. Steven W. Usselman I 296

Edison's Laboratory at West Orange, N.J., 1890s • Edison moved his operations here from Menlo Park in 1887. Though eventually a cluster of manufacturing shops would surround this laboratory, the modest facility contrasted markedly with Westing- house's investments along Turtle Creek. The comparison shows how differently the two inventors had come to allocate their energies following their initial successes. (Photo- graph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National Historic Site, negative no. 6682.) patent gave Westinghouse's Union Switch and Signal Company a virtual monopoly in the field of automatic signaling. Despite the many initial similarities, the market for railroad signals ultimately fostered a different sort of enterprise than the brake company. With the public insisting that trains have modern safety devices and railroads seeking to maintain uniformity in their rolling stock, the air brake rapidly became a standard commodity produced and sold in volume. Standardization came much more slowly to signaling technology. Long after passengers demanded that trains have good brakes, they still did not expect them to be protected by automatic signals along routes that might traverse thousands of miles. They left railroads free to install signals in piecemeal fashion at dangerous and congested locations. Because such sites often included unusual configurations of track and switches, the signaling business for many years consisted almost exclusively of specialized contract work. Signaling technology remained in flux, as engineers struggled to adapt it to particular circumstances and to make it more reliable. Incentives to achieve standardization acted more on the suppliers than on the railroads. To attain long-term success in the signaling business, Westing- house first needed to win lucrative contracts from railroads as they George Westinghouse and the Business of Innovation I 297 rebuilt terminals and laid new switching facilities.106 His initial patent protection, combined with his experience in marketing to railroads, gave Westinghouse an advantage over competitors during the early stages of this process. Union Switch and Signal used these pilot contracts to build a base of expertise on which it could draw in subsequent jobs as automatic signaling grew more common. By scrupulously obtaining patents on the countless innovations devised in the field, the company could keep imitators at bay and ensure its control of those devices that eventually proved to have the greatest applicability. Following this course, Westing- house steadily secured another stronghold in the railroad supply trades.107 In retrospect, one can readily detect how the signaling enterprise broadened Westinghouse's business experience in ways that further prepared him for success with electric power. A typical signaling installation involved many devices spread over a large area, controlled from a central location and powered from a distance. Probably no other technology of the day more closely resembled the isolated power plants that dominated the electrical trade in its infancy. Signaling facilities often made extensive use of electricity, and even when they depended primarily on compressed air, they could provide useful knowledge about power distribution.108 As in the case of brakes, patents proved essential, but this time Westinghouse built control by acquiring a fundamental patent from outside, just as he would gain the upper hand with alternating current by obtaining rights to the transformer. Perhaps most important, the signaling business introduced Westinghouse to the world of contract work. He had to submit complex bids to informed consumers and to work closely with them over a sustained period. As the business grew, he needed to manage a staff

106 Carl W. Condit, The Railroad and the City: A Technological and Vrbanistic History of Cincinnati (Columbus, Ohio, 1977) and The Port of New York: The History of the Rail and Terminal System from the Beginnings to Pennsylvania Station (Chicago, 111., 1980), provides detailed accounts of custom signaling installations at some major stations. 107 Prout, Westinghouse, lists and describes many patents pertaining to signaling taken out by Westinghouse during the last fifteen years of the nineteenth century, when one might expect the inventor's energies to have been monopolized by electric power. 108 As late as 1892, the experts at Scientific American still considered compressed air a serious alternative to electrical distribution. The committee responsible for acquiring the pioneer alternating current plant at Niagara Falls seriously considered a plan that called for the electricity generated to drive air compressors, which would then dis- tribute power at a distance. Steven W. Usselman I 298

Westinghouse in the Middle, c. 1910 • A few years before his death, Westinghouse paused for a rare photograph outside one of his production facilities. Flanked by an independent naval inventor on his right and by a bureaucrat from the naval procure- ment office on his left, he struck a pose entirely befitting someone who had so success- fully bridged the worlds of invention and organization. (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7929.) of experts dispersed at various job sites, making sure knowledge flowed freely among them and among those responsible for design and production at the factory, so that lessons were learned quickly, duplication of effort was minimized, and improvements were patented promptly. The overarching challenge was to take a complex new technology being developed under particular circumstances at numerous installations and bring standardization to it as rapidly as possible. This was precisely the task posed by the electrical industry.

Conclusions

"In the beginning," Lewis Mumford wrote of the electric light, as well as of the telephone, the phonograph, and some other inventions of the age, "they were still almost toys, and before their potentialities had been transformed into slick routines, they had a George Westinghouse and the Business of Innovation I 299

The Power Plant at Niagara Falls, 1898 • By far the largest electrogenerating facility constructed to that date, the Westinghouse plant firmly established the economic advantages of large-scale alternating current generation and distribution. (Photograph reproduced courtesy of the Smithsonian Institution, Washington, D.C., negative no. 79-9343.) power to stir the mind . . . they were wonders of nature, before they became utilities."109 Thomas Edison and George Westing- house, born just four months apart, somehow stood on opposite sides of the transformation. For Edison, such technologies always remained toys—novelties to stir the mind and spark the senses. For Westinghouse, they were never anything other than utilities. The idiosyncratic Edison captured more attention at the time and has continued to fascinate us. But if we seek to understand how the chaotic realm of the nineteenth-century inventor gave way to the more structured routine of the corporate research program, we might better look to Westinghouse. Like so many innovators of their day, Edison and Westing- house were both nurtured in the culture of the machine shop. They came to that world just as it was primed to generate a star- tling amount of novelty. The development of electrical technology and the gradual accumulation of new materials had opened up

109 Lewis Mumford, The Brown Decades: A Study of the Arts in America, 1865- 1895 (1931; New York, 1955), 35. Steven W. Usselman I 300

Assembling the Generators for Niagara Falls, 1895' Westinghouse employees assemble one of the alternating current generators seen along the right of the power station in the previous illustration. (Photograph reproduced courtesy of the Smithso- nian Institution, Washington, D.C., negative no. 79-9342.) enormous possibilities for invention. A profusion of technical literature enabled individual mechanics to keep abreast of their brethren with far greater ease than ever before. The growth of cities and their increasing integration into a common network, together with the development of technical systems such as the telegraph, gave inventors an abundance of prospective markets. As Edison demonstrated so spectacularly, a clever mechanician with an instinct for promotion could thrive by delivering novelties in a timely fashion to the urban elite. But Edison's approach was neither typical nor enduring. Though innovations in consumer products have always generated interest among observers from outside the technical community, they have absorbed comparatively little of the energies of those within it. Most products of machine shop culture moved without great fanfare into practice in American industry, just as much of the1 activity in corporate R&D programs would be directed at the producers' goods sector and at improving manufacturing processes. Even in cases of product innovation, moreover, ventures George Westinghouse and the Business of Innovation I 301

The Westinghouse Electric and Manufacturing Company, c. 1906'Located along Turtle Creek between the air brake company and Carnegie's steel works, with the Pennsylvania Railroad passing in the foreground, this mammoth facility placed the electrical business squarely in the tradition of heavy industry. Electric power was now clearly a utility. (Photograph reproduced courtesy of Carnegie Library, Pittsburgh, Pa., negative no. P-7923.) have seldom survived long on novelty alone. As so many examples from Edison's career attest, success has flowed ultimately to those who have given sustained attention to marketing and manufacturing as well as to technical creativity. The key has been to strike balances over time between novelty and predictability; to know when to seek additional performance and when to stabilize a design in order to achieve greater standardization; to decide whether to cater to specialists willing to pay top dollar or to drive down costs and pursue a mass market. By creating research and development programs and joining them to established manufacturing and marketing structures, ver- tically integrated corporations would bring much of this effort inside a single organization. In taking this step, firms did not elim- inate the need for compromise; they acknowledged the paramount importance of it.110 Operating a generation earlier, in a world of much less developed institutions, both Edison and Westinghouse distinguished themselves through their ability to create conduits that linked the abundant novelty of the machine shop with the burgeoning markets of the day. In the context of their times and

110 Even in the corporate environment, the business of innovation has frequently involved the careful cultivation of relations with outside institutions. DuPont, for example, has often worked closely with manufacturers of finished products to educate them about new materials, while simultaneously advertising those products to the general public. See Hounshell and Smith, Science and Corporate Strategy. Steven W. Usselman I 302 their environment, both assumed extensive responsibility for marketing and manufacturing the products of their fertile inventive minds. But of the two, Westinghouse came far closer to developing the capabilities and attaining the objectives later sought by corporate managers who created research programs. As an inventive engineer, Westinghouse exhibited a willingness and ability to strike technical compromises that moved him toward a stronger overall economic position for the long run. Always cognizant of manufacturing and marketing, he brought a discipline to his own innovative activities very much like the discipline that corporate research directors would at times impose on their creative person- nel. As a businessman, Westinghouse demonstrated remarkable persistence and thoroughness in gaining entry to markets and securing control over technology. He built comprehensive, integrated organizations dedicated to particular lines of enterprise. In the process, he displayed an impressive array of tactics, including a sophisticated manipulation of patent rights. These characteristics and strategies were precisely those that would come to distinguish many corporate research programs, and they led Westinghouse to precisely the same ends. They enabled him to establish enduring positions of control. All of these features were apparent in Westinghouse's enterprises long before he entered the electrical industry. They emerged in the railroad supply business, where the young inventor had encountered the most institutionally sophisticated industry of the day. There Westinghouse learned by necessity how to transform novelty into utility. When he later turned to electric power and crossed paths with Edison in the acrimonious battle of the currents, the meeting thus involved more than competing technical systems. It brought into conflict two different approaches to the business of innovation. Each man supported a technology that complemented his own established strengths and inclinations. Edison, who had always responded most effectively to the demands of the consumer market, pushed a small-scale technology that seemed safer for home and office use. Having produced light, he dreamed of adding fans and other appliances. Westinghouse, steeped in the systems culture of railroads, advocated a technology that might rapidly transform electric lighting plants into utilities producing power. He pressed for large-scale installations, and George Westinghouse and the Business of Innovation I 303

Edison with His Motion Picture Machine, 1905 • Long removed from involvement in the electrical industry, Edison focused his creative talents on amusements such as moving pictures and improved phonographic recordings. (Photograph reproduced courtesy of U.S. Department of the Interior, National Park Service, Edison National His- toric Site, negative no. 6273.) though he hoped eventually to accommodate all types of users, he dealt first and most comfortably with industrial customers.m The alternating current systems that Westinghouse endorsed eventually achieved such dramatic economies of generation that they became the foundation stone of electric power everywhere. But Westinghouse's ultimate success in the electrical business can hardly be understood as the product of one wise technical judgment. It flowed as well from the business strategies that he had developed in response to the railroads. Though Westinghouse

111 The breakthrough plant at Niagara Falls was a contract job organized by a con- sortium of industrialists who were financed with the assistance of J. P. Morgan. Its power flowed primarily to large electroplating facilities built nearby. On Westinghouse and the development of the pioneer alternating current generating plants, see Passer, The Electrical Manufacturers and Hughes, Networks of Power, chap. 5. Steven W. Usselman I 304 entered the electrical industry with great hopes for alternating current, from the start he created an organization that would func- tion as a comprehensive supplier and contractor for all types of electrical equipment. He sold direct as well as alternating current, as he had once sold vacuum as well as air brakes. For over a decade, installation of direct current kept the enterprise afloat and gave Westinghouse a presence in the market while he laid the groundwork for alternating current. The dispute with Edison came during this effort; it was one obstacle among many. Westinghouse handled it much as he had the public trials of the vacuum brake, with a publicity campaign of his own and redoubled efforts to per- suade industrial customers of the merits of his own system. The real conflict between Westinghouse and Edison actually occurred before the public one, and it was less a battle than a passing of the baton. Just at the moment Westinghouse ventured into the electrical industry, J. P. Morgan orchestrated the formation of Edison General Electric, a merger of the Edison electrical interests with the Thomson-Houston Company. Thomson- Houston provided some expertise in alternating current, but Mor- gan also sought the "administrative and marketing talent" of Charles A. Coffin, the firm's "exceptionally able salesman and organizer."112 In effect, Coffin served as antidote to Thomas Edi- son. Under his stewardship, GE became distinguished as much for its organized network of distribution as for its technical innovation. Indeed, it came to resemble the sort of integrated enterprise that George Westinghouse had developed to supply the railroads and was then creating in the electrical industry. Not coincidentally, GE soon settled into a long period of duopolistic competition with Westinghouse, and the electrical industry rapidly acquired its characteristic qualities of discipline, order, and system. Mean- while, Edison turned back to the less-structured world of the phonograph, where technical novelty remained the most important asset, at least until the marketers from Victor transformed it, too, from a toy into a utility.

112 Passer, The Electrical Manufacturers, 192 and 326. For additional information on the roles of Morgan and Coffin in the electrical industry, see W. Bernard Carlson, Innovation as a Social Policy: Elihu Thomson and the Rise of General Electric, 1870- 1900 (New York, 1991).